Amazon PPC (Pay-Per-Click) advertising continues to be a pivotal component of Amazon sellers’ marketing strategies in 2025. However, navigating the complexities of campaign performance metrics can be overwhelming. One of the most frequently discussed—and misunderstood—metrics in Amazon PPC is ACoS, or Advertising Cost of Sales. Knowing what constitutes a good ACoS is essential for optimizing advertising spend, improving ROI, and ultimately driving profitable growth.
What is ACoS and Why It Matters
ACoS (Advertising Cost of Sales) is calculated by dividing your ad spend by the revenue generated from that spend. The formula is:
ACoS = (Ad Spend ÷ Ad Revenue) × 100
For example, if you spent $100 on ads and generated $500 in sales from those ads, your ACoS would be 20%. This metric is crucial because it tells you how efficiently your advertising budget is being used to generate sales. Understanding your ACoS helps determine which campaigns are profitable and which need adjustment.
Average ACoS in 2025 Across Categories
What’s considered a “good” ACoS can vary significantly depending on your niche, product margins, and goals. In 2025, competition has intensified on Amazon, leading to fluctuations in average ACoS figures across different categories.
- Consumer Electronics: 25%–35%
- Health & Personal Care: 20%–30%
- Home & Kitchen: 15%–25%
- Books: 10%–20%
- Clothing & Accessories: 25%–40%
These benchmarks provide only a rough guide. Your target ACoS should align with your product’s profit margins and campaign goals.
Types of ACoS: Break-Even, Target, and Optimal
To truly grasp what is a good ACoS for you, you must understand three key ACoS benchmarks:
- Break-Even ACoS: This is the ACoS at which your profits are zero. If your product’s profit margin is 30%, then a 30% ACoS is your break-even point. Any ACoS higher than this means you’re losing money.
- Target ACoS: This is based on your business goals. For profitability, this should be lower than your break-even ACoS. If you’re aiming for aggressive market penetration, you might tolerate a higher Target ACoS temporarily.
- Optimal ACoS: This ACoS produces the best balance between visibility, sales volume, and profitability. Finding this sweet spot requires testing and ongoing optimization.
Factors That Affect Your Ideal ACoS
Several variables influence what a good ACoS is for your specific situation in 2025:
- Profit Margins: High-margin products can afford a higher ACoS and still remain profitable.
- Business Objectives: Launch campaigns may accept higher ACoS for accelerated sales, whereas mature products should aim for profitable ACoS ratios.
- Product Lifecycle: New product listings usually start with higher ACoS due to limited customer data and fewer reviews.
- Seasonality: ACoS may spike or drop depending on demand fluctuations, for example during Q4 or Prime Day.
How to Improve Your ACoS
Improving ACoS requires informed decision-making and continuous strategy refinement. Here are several actionable tips:
- Keyword Optimization: Use high-converting, relevant keywords; eliminate low-performing ones regularly.
- Budget Allocation: Direct more budget toward best-performing campaigns while pausing underperforming ones.
- Targeting Strategy: Utilize a mix of automatic and manual targeting for broader reach and precision.
- Ad Format Testing: Experiment with Sponsored Products, Sponsored Brands, and Sponsored Display to find what works best for your products.
- Listing Conversion: Optimize your product listings—images, bullet points, titles, and reviews—to convert clicks into purchases more effectively.
Conclusion: Defining a Good ACoS in 2025
A good ACoS in 2025 is not a one-size-fits-all number. It depends heavily on your individual business structure, goals, and market dynamics. However, as a general rule:
- ACoS below 15%: Excellent for high-margin products and profitability-focused campaigns.
- 15%–30%: Typically considered a healthy range for most categories.
- Above 30%: Acceptable for brand awareness or product launches but should be monitored closely for sustainability.
Ultimately, understanding and managing your ACoS is fundamental to Amazon PPC success. Continuously analyze your campaigns, adjust based on performance, and align your advertising strategies with your business objectives to achieve a competitive advantage in 2025.